We’ve been the experts in tradies insurance for over a decade!
There’s not much we haven’t learned about insurance for tradies over that time, and now we’ve put together our ultimate guide.
In this guide we’ll be covering the following types of tradies business insurance:
- Tradies public liability
- Tradies tool insurance
- Personal accident insurance
- Commercial motor insurance
- Other forms of tradie insurance
- Tradies insurance cost
- How Trade Risk can help
We will take a look at each of these important forms of insurance for tradies, as well as what they cover and who needs them.
If you would prefer to speak with an insurance expert about any of these covers, please call us on 1800 808 800.
Tradies Public Liability Insurance
The most commonly required form of tradies insurance is public liability.
What is it?
Public liability insurance will respond you if your negligence results in property damage or personal injury to another person.
In layman’s terms, if you stuff up and someone gets injured, or their property is damaged, you’ll be covered!
If you are found responsible you will be liable for costs which can include repair, replacement, medical expenses, rehabilitation and even lost income.
Property damage example:
You’re an electrician installing new lights in a client’s ceiling. You’ve sent the apprentice up into the roof cavity, and they’ve stuck a leg down through the plaster ceiling.
Thankfully the apprentice isn’t injured, but you’re now liable for having the plaster repaired and the ceiling repainted.
As the damage was a result of negligence (the apprentice stuffed up) your public liability insurance will cover the costs of the damage.
Personal injury example:
You’re a carpenter replacing a set of entry stairs for a client. You’re half-way through the job when your phone rings, and you walk away with a couple of stair treads sitting in place, but not secured.
A visitor to the home walks up the stairs, not realising the treads are unsecured, falls and breaks their leg.
As you left the stairs in an unsafe state, without blocking them off or having any warning signs, you’re liable for the injuries suffered by the third party.
Because the injury is a result of your negligence, thankfully your public liability policy will respond.
The costs of such a claim could easily go into the tens of thousands, so it’s easy to see why public liability is such an important for of trades insurance.
Which tradies need it?
Public liability is required by virtually any tradie who is self-employed, including those working as subcontractors.
Some tradies will require it based on their licencing reequipments. For example electricians and plumbers in most Australian states will need public liability insurance in order to obtain or renew their licence.
Other trades might not need it for their licence, but may require it to work on certain sites. Many sites will now require that you hold public liability insurance in order to enter the site.
Contracts you sign might also require that you hold insurance. The contract may also stipulate a minimum amount of insurance that is required.
How much is it?
The public liability insurance cost for a tradie can vary hugely depending on the size and activities of your business.
For a typical tradie working on residential jobs only, the minimum $5 million public liability can be had from as little as $500.
If you’re running a larger team of tradies the costs will increase based on the size of your business.
For higher risk trades, such as boilermakers and tree loppers, or for tradies working in the mines, the cost will be higher depending on the level of risk.
Tradies Tool Insurance
Most tradies won’t be able to work without their tools, and as a self-employed tradie, no work generally means no money.
Sadly, tool theft is rampant in Australia, which makes tool insurance one of the most important forms of tradies insurance available.
What is it?
A tool insurance policy can help to ensure that your tools are replaced if they are stolen or damaged.
Each policy will have different levels of coverage. A typical policy will cover theft following forced entry, fire and storm damage and damage caused in a vehicle collision.
For most tradies, theft is the main risk they require cover for, and it’s important to understand how the coverage works.
Most policies only cover theft following forced entry, which essentially means that something needs to have been broken in order to access the secured tools.
This could be breaking into your ute or van, cutting bolts on a secured toolbox, or even breaking into your home or shed.
Either way, you’ll need to provide a police report and be able to prove that forced entry was required in order to access your gear.
Which tradies need it?
If you own tools, and you’d want them replaced if they were stolen, then you probably need tradies tool insurance!
Personal Accident Insurance
People like to say tradies earn great money, but for self-employed tradies the flipside is that you don’t have access to sick pay or holiday pay.
It’s great whilst you’re making the good money, but if you suffer an injury or illness that keeps you off the tools, often that means the money dries up pretty quickly.
That’s why personal accident insurance is another vital form of tradies insurance.
What is it?
Personal accident insurance can cover a large percentage of your income whilst you’re unable to work for a period of time due to illness or injury.
The purpose of personal accident insurance is to ensure that you can continue to pay your mortgage or rent, as well as keep food on the table, even if you cannot earn an income through work.
There are loads of different options when it comes to personal accident, so it’s important to speak with a professional (like us!) to run through the options and the costs.
Is it the same as income protection?
Yes and no… In many ways they are very similar, but there are some important differences.
For starters, income protection is only available via financial planners, whereas personal accident insurance is available via insurance brokers like Trade Risk.
Income protection is generally considered to be a more comprehensive form of cover, but is also a more expensive form of cover.
For most tradies, personal accident is a great form of cover, but for high-earning tradies wanting superior coverage, it is worth looking at income protection insurance.
Which tradies need it?
All tradies can benefit from income protection insurance, but predominantly it is the self-employed tradies and subcontractors who are required to have it.
Many worksites have requirements in place for all self-employed and subcontracting tradies to hold personal accident insurance. This is because these workers will not be covered by sick leave or worker’s compensation.
Regardless of whether or not your contracts or worksites require it, personal accident is a super important form of trades insurance for those who are self-employed.
Proud supporters of TIACS – Providing free mental health services for tradies.
Commercial Motor Insurance
Many tradies don’t necessarily look at their car insurance as a form of business insurance, but you probably should.
Whilst it is cheap and easy to insure you ute or van through an online insurer such as AAMI or NRMA, it is worth knowing about the differences.
First up, if you’re not advising your insurance company about the business use, your whole policy could be null and void.
Even if you have advised them of the business use, the coverage might still not be up to scratch for a business.
A proper commercial motor insurance policy through an insurance broker such as Trade Risk has a number of benefits worth considering.
Fit-out is one of the big ones. Your ute or van might have a $10k fit-out with toolboxes or shelves, but you’ll probably find that a cheap online policy won’t cover those extras.
A proper commercial motor policy can.
Another one is signage. A full wrap on a van or dual-cab ute can cost upward of $5k, but a cheap online policy often won’t cover that full cost.
Plant & machinery insurance
This won’t be relevant for all tradies, but for others it will be vital form of trades insurance.
For trades such as plumbing and landscaping, and businesses involved in excavation and earthmoving, you’ll generally own some for of plant and machinery.
This could include excavators, skid steer loaders, bulldozers and more.
It could also be equipment relating to your warehouse. For example a large electrical contracting business with it’s own warehouse might have forklifts, scissor lifts and other equipment.
All of these types of plant and equipment can be insured for a range of risks including damage, breakdown, theft and even liability whilst the item is in use.
Plant & machinery insurance differs to trade tool insurance in that we’re covering major items of equipment, as opposed to smaller portable power tools.
Other forms of tradies insurance
Typically when we think of trades insurance we’re talking the big three – pubic liability, tools and personal accident, but there actually many more.
Which ones you might need really depend on your business in terms of size and complexity.
Other forms of insurance that could be required by a tradie include:
- Professional indemnity insurance
- Contract works insurance
- Contractual liability insurance
- Management liability insurance
- Cyber insurance
- Property insurance
- Machinery breakdown insurance
- The list goes on…
If your business is at the point where basic trades insurance is no longer cutting it, then it’s time to speak with expert insurance brokers like we have at Trade Risk.
What business types fall under the trades insurance category?
All insurance policies are based on the specific occupation or business activity being undertaken, rather than falling under a generic “tradies insurance” category.
The term is generally used to describe any forms of business insurance that could relate to a business that operated in the construction trades.
These could include trades such as:
- Carpenters
- Electricians
- Plumbers
- Tilers
- Painters
- Bricklayers
- Plasterers
It can also extend to occupations which aren’t actual trades as such, but still undertake manual work related to property:
- Handyman / property maintenance
- Lawn mowing
- Gardening
But the list can extend into the hundreds when we’re looking at all qualified trades and related occupations.
Whether you consider yourself to be a tradie or not, if you’re undertaking business involving construction or property services, you’ll need some form of business insurance.
Whilst most trades have fairly similar insurance needs, there are some with their own unique requirements.
We’ll touch on a few of the most common ones below.
Electrical trades insurance
Licensed electricians in most Australian states will require public liability insurance at a minimum.
This isn’t just a recommendation, this is a legal requirement in order to obtain or renew an electrical contractors licence.
For licensed electricians in Queensland, the insurance requirements go a step further with an additional requirements for consumer protection insurance.
Plumbing trades insurance
As with electricians, licensed plumbers in most Australian states will have a mandatory requirement for public liability insurance.
Victoria has additional requirements, with plumbers also required to hold plumber’s warranty insurance as part of their public liability policy.
Without the warranty endorsement, plumbers in Victoria will no be able to obtain or renew their trades license.
Tradies insurance cost
The cost of trades insurance will depend on a couple of major factors:
- The trade / business activities
- The size of the trades business
- The types and levels of cover required
We could be talking as little as $500 for a one-man residential trades business than only requires public liability, through to $500,000 (or more!) for a large national contractor with hundreds of staff and millions of dollars worth of assets to protect.
From here we have to drill down further to the types tradies insurance.
Public liability insurance cost
We’ll kick off with public liability, since it’s the most commonly required form of trades insurance.
There are four main factors that will impact the cost of tradies public liability insurance:
- Your trade / occupation
- Size of business – by revenue and/or staff numbers
- Subcontractor usage
- Hazardous work activities / locations
If you’re a carpenter operating as sole trader with no staff, don’t use subbies and don’t operate outside of residential and light commercial work, your public liability cost could be as low as $500 a year.
But say you have a team of ten chippies on salary, you do some work on industrial sites and also subcontract out a chunk of your work, you’ll be spending thousands on your public liability.
Keep in mind though, your revenue for this business will be many times higher than the first example, so your insurance – as a percentage of your expenses – probably won’t be any worse.
Other trade insurance costs
For forms of trades insurance other than public liability, the cost will vary hugely depending on the type of cover and the amount required.
Tool insurance is a very common form of cover for tradies, and can be had from as little as $500 for around $5,000 worth of cover.
Personal accident insurance is another important form of trades cover. It can cost anywhere from $1,000 to many thousands, depending on how much income you need to cover.
Also impacting upon the personal accident cost will be the waiting period and benefit periods chosen, as well as your age and occupation.
Next we move onto assets such as vehicle, plant & machinery, contents, stock and even buildings.
These assets will all have varying costs for insurance depending on the type and value of the asset.
The easiest way to get an exact costing of your trades insurance needs is to request a quote from Trade Risk.
How Trade Risk helps tradies
We’ve been helping tradies with their insurance needs for over a decade.
Our team of insurance brokers deal exclusively with tradies. Whether you’re a one-man-band subbie or you’re employing a team of fifty electricians, we’re here to help.
We use the knowledge and experience gained in helping over 10,000 tradies to help find the right policies that will meet your needs and budget.
As qualified insurance brokers we can provide personalised advice on the best forms of cover for your trades business, as well as helping you through the claims process.
We love helping tradies with their insurance. We’ve been doing it for over a decade, and we’d love to help you too.
For more information about tradies insurance or to obtain a quote please call our office on 1800 808 800 or complete our online quote request.
Author: Shane Moore. Last updated: 12/03/2024.
